In a statement, the Master Builders Association Malaysia (MBAM) and Malaysian Bumiputera Contractors Association (PKBM) said the cost of building materials such as quarry products and ready-mix concrete increased when diesel subsidies were lifted in Peninsular Malaysia on Monday.
The move saw a hike in the price of diesel from RM2.15 per litre to RM3.35.
“This has indirectly affected the industry, given that most of our construction contracts are a fixed price lump sum. There is rising concern as to how contractors will weather such ripple effects,” they said.
“Both MBAM and PKBM, alongside MBAM’s 40 affiliate members, urge the government to include the relevant types of vehicles transporting materials such as quarry products and ready-mix concrete, as well as cranes, in the fleet card system.
“(This will allow) a balance to be struck between achieving the rationalisation objectives and managing future construction costs, particularly among small contractors,” said the statement issued by MBAM president Oliver Wee and PKBM president Azman Yusoff.
The groups also called for project owners to consider including variation of price provisions for materials, which they said would help make the construction industry sustainable.
They said while the decision to implement targeted subsidies had been publicised since late last year, they want more clarity about the policy to give essential logistics providers supporting the construction industry a “soft landing”.
On Tuesday, FMT reported that concrete producers had raised their prices following the hike in the price of diesel.
Later that day, domestic trade and cost of living minister Armizan Mohd Ali said the construction industry was never eligible for subsidised diesel, even before the commodity was rationalised on Monday.
He said the ministry would investigate companies which cite their inability to purchase subsidised diesel in increasing their rates.
The government launched the Budi Madani programme late last month to ensure that subsidies are allocated to those who truly qualify and to reduce the burden of those in need, through the provision of a monthly cash assistance of RM200.